Exam 16: Monetary Theory and Policy

Since the financial crisis the Fed has tried to increase its transparency by communicating its intention more clearly.Which of the following is not one of the approaches employed by the Fed in this open communication policy?

In order to become more transparent,the Fed

Which of the following,other things constant,will shift the money demand curve to the left?

In order for changes in the money supply to affect real GDP,the aggregate supply curve cannot be vertical.

Which of the following would cause an increase in the velocity of money?

If the Fed sells government securities to banks,eventually we expect

Because __________ the federal funds rate __________ the cost of covering any reserve shortfall,banks are __________ willing to lend to the public.

The Kennedy-Lieberman Act brought the shadow banking system under the Fed's regulatory control.

In October 1979 the Fed announced that it would focus on

Exhibit 15-7 -Referring to Exhibit 15-7,an increase in the price level will cause a move from

Of the following,the major influence on the supply of money is

Planned investment expenditures will eventually increase after

If the Fed is targeting the money supply,it loses control over the interest rate.

What would be the ultimate effect of a reduction in the money supply?

The policy of the Fed purchasing long-term assets to stabilize financial markets is called

In an economy in which velocity is constant and real output grows at an average rate of 4 percent per year,a 4 percent average rate of growth in the money supply would result in

For the quantity theory of money to yield useful predictions,

If the quantity of money supplied exceeds the quantity of money demanded,